Gov't sets up task force to monitor stock market

Premier Sean Chen yesterday appointed Vice Premier Jiang Yi-huah to head a special task force to help monitor stock trading and shore up investors' confidence in the local stock market that has been pounded by the world economic slowdown and domestic uncertainties.

Internal problems like the steep hike to fuel and electricity costs as well as suspense over government policy over a capital gains tax on securities investment have kept most investors on the sidelines.

The weighted index edged up 18.46 points, or 0.25 percent, at 7,395.64, after moving between 7,291.44 and 7,396.42. Turnover totaled NT$68.09 billion (US$2.31 billion) during the session.

The market opened down 0.85 percent and moved to the day's low as investors remained cautious about the lingering financial crisis in the eurozone with particular concern over Greece as political parties in the debt-ridden nation have been struggling to form a coalition government after the May 6 parliamentary elections.

After the index fell below 7,300 points, bargain hunting emerged targeting some electronics heavyweights, including smartphone manufacturer HTC Corp. and cellphone camera lens supplier Largan Precision Industry Co. They helped lift share prices on the broader market by the end of the session, said securities analysts.

Largan rose by the maximum daily increase of 7 percent to close at NT$497.50, and HTC gained 3.53 percent to end at NT$440.00.

Despite the minor gain yesterday, the weighted index has fallen about 9 percent since the beginning of March. Daily turnover fell to a three-year low of only NT$45.50 billion (US$1.54 billion) Monday, with many investors refraining from entering the market.

The total transaction value improved but remained dismally low yesterday.

Confidence

Premier Chen said the sharply reduced trading volume was a warning sign, but the share price fluctuations as observed in the market were not out of the ordinary.

Securities analysts said that the Taiwan stock market can recover only after investors regain their confidence.

But the prolonged indecision on the government's plan to revive the capital gains tax on stock investments has kept investors in suspense.

Many investors said it is difficult for them to make investment decisions until the dust settles.

The premier said he has asked Vice Premier Jiang to lead a special task force to work on effective measures to bolster investors' confidence.

Jiang is now already the top government official to coordinate the investments of the state-owned National Stabilization Fund to prevent irrational slides in stock prices due to non-economic factors.